National Payments Corporation of India (NPCI) and its Products

Part 1

National Payments Corporation of India (NPCI) is an umbrella organization for all retail payments system in India.

It was set up in December, 2008 with the guidance and support of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA).

The core objective was to consolidate and integrate the multiple systems with varying service levels into nation-wide uniform and standard business process for all retail payment systems.

The other objective was to facilitate an affordable payment mechanism to benefit the common man across the country and help financial inclusion.

NPCI has ten promoter banks namely, State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC.

Headquarter – Mumbai

Non-executive Chairman Shri Balachandran M

Managing Director & CEO – Shri A. P. Hota

Nominee Director from RBI – Shri B. Sambamurthy

Product and  Services of NPCI

a) National Financial Switch (NFS)

The National Financial Switch is the largest interconnected network of automated Teller Machines (ATMs) in India. This system was developed by Institute of Development and Research in Banking Technology (IDRBT), Hyderabad in 2004. It is run by the National Payments Corporation of India (NPCI).

The National Financial Switch enabled the interconnectivity between the bank’s switches such that the transactions made at any ATM could be routed to the connected banks. This was done with a view to connecting all the ATMs in the country and facilitates easy banking for the common man residing anywhere in the country.

The NPCI has allowed any bank offering the core banking services round the clock with or without ATM can be a part of this National Financial Switch through a sponsor bank. The objective behind such a move is to enable the non-scheduled cooperative banks and other regional rural banks to access the wide network of ATMs in the country. Thereby, enabling the customers of such bank to access banking services through any ATM of a connected bank.

b) Immediate Payment Service (IMPS)

IMPS is an innovative real time payment service that is available round the clock. This service is offered by National Payments Corporation of India (NPCI) that empowers customers to transfer money instantly through banks and RBI authorized Prepaid Payment Instrument Issuers (PPI) across India.

Key Features of IMPS

  • Instant money transfer
  • Available 24 x7 (functional even on holidays)
  • Safe and secure, easily accessible and cost effective
  • Channel Independent can be initiated from Mobile/ Internet / ATM channels
  • Debit & Credit Confirmation by SMS

c) Unified Payment Interface (UPI)

Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.

Key Features of UPI

  • Immediate money transfer through mobile device round the clock 24*7 and 365 days.
  • Single mobile application for accessing different bank accounts
  • Single Click 2 Factor Authentication – Aligned with the Regulatory guidelines, yet provides for a very strong feature of seamless single click payment.
  • Virtual address of the customer for Pull & Push provides for incremental security with the customer not required to enter the details such as Card number, Account number, IFSC etc.
  • Bill Sharing with friends.
  • Merchant Payment with Single Application or In-App Payments.
  • Utility Bill Payments, Over the Counter Payments, Barcode (Scan and Pay) based payments.
  • Raising Complaint from Mobile App directly.

d) National Automated Clearing House (NACH)

National Automated Clearing House (NACH) is a centralised, web-based clearing service that can ease the work of banks, financial institutions, the government and corporate by consolidating all regional ECS systems into one national payment system, thereby removing any geographical barriers in efficient banking. Started by the National Payments Corporation of India (NPCI), NACH aims to create a better option for facilitating clearing services than the existing Electronic Clearing Service (ECS) system. The service is now active in all Indian banks with core banking facility. It facilitates both ECS credit and ECS debit.

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